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Gasoline Taxes and the Great Depression: A Comparative History
Published online by Cambridge University Press: 02 September 2014
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- Copyright © Donald Critchlow and Cambridge University Press 2014
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1. Robert Pirog, The Role of Federal Gasoline Excise Taxes in Public Policy, Congressional Research Service Report R40808, dated 11 September 2009, http://opencrs.com/document/R40808/2009-09-11, accessed 2 December 2010. This study used market-exchange rates rather than purchasing-power parities to convert to dollars; it also included not only gasoline-specific excise taxes but also general sales or value-added taxes imposed on all goods, which are somewhat higher in Europe than the United States and contribute about 10 percent to 15 percent of the difference in price.
2. On the widening of the disparity in gasoline tax rates across the developed world since 1978, see Hammar, Henrik, Lofgren, Asa, and Sterner, Thomas, “Political Economy Obstacles to Fuel Taxation,” Energy Journal 25 (2004): 1–18.CrossRefGoogle Scholar
3. U.S. gasoline tax rates are a combination of federal tax rates from Federal Highway Administration, Highway Statistics 2009, table FE101a, http://www.fhwa.dot.gov/policyinformation/statistics/2009/fe101a.cfm, accessed 20 April 2012, and state tax rates from ibid., table MF205, http://www.fhwa.dot.gov/policyinformation/statistics/2009/mf205.cfm, accessed 20 April 2012; idem, Highway Statistics Summary to 1995, table MF205, http://www.fhwa.dot.gov/ohim/summary95/mf205.pdf, accessed 20 April 2012; and idem, Highway Statistics Summary to 1985 (n.p., n.d.), 131–34. Until 1966, the highest-taxed American state was in the South, alternating between Florida, Louisiana, Oklahoma, and Arkansas; since then, the lead has rotated mostly among Washington State, Connecticut, and Rhode Island.
German gasoline tax rates are from Robert Adamek and Friedrich Saake, Die Strassenkosten und ihre Finanzierung (Bielefeld, 1952), 125, and Bundesministerium der Finanzen, “Entwicklung der Energie- (vormals Mineralöl-) und Stromsteuersätze in der Bundesrepublik Deutschland,” May 2009, http://www.bundesfinanzministerium.de/nn_4192/DE/BMF_Startseite/Service/Downloads/Abt_IV/060,templateId=raw,property=publicationFile.pdf, accessed 23 December 2010.
British petrol tax rates have been taken from the relevant Finance Acts and from HM Revenue & Customs, “Hydrocarbon Oils: Historical Duty Rates,” http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_RatesCodesTools&propertyType=document&id=HMCE_PROD1_023552, accessed 4 December 2012.
New Zealand tax rates have been taken from the relevant taxation acts and from the Ministry of Economic Development, New Zealand Energy Data File 2010, table I.5b, http://www.crownminerals.govt.nz/cms/pdf-library/folder.2007-05-17.4547411750/EDF%202010.pdf, accessed 10 December 2010.
In the British, German, and New Zealand cases, the excise tax has been increased by the value-added tax on the excise tax, but not the value-added tax on the pre-tax price of gasoline, as that is a general sales tax rather than a tax specific to gasoline. In the American case, as sales taxes are generally less significant and most frequently are not charged on gasoline, I have not included them in my calculations.
All gasoline tax rates, as well as other price data mentioned in the text, were converted to 2005 U.S. dollars as follows. First, prices were adjusted to 2005 amounts in local currency using the following consumer price index series: Lawrence H. Officer, “The Annual Consumer Price Index for the United States, 1774–2009,” MeasuringWorth, 2010, http://www.measuringworth.com/uscpi, accessed 10 December 2010; idem, “What Were the UK Earnings and Prices Then?” MeasuringWorth, 2009, http://www.measuringworth.com/ukearncpi, accessed 10 December 2010; Statistisches Bundesamt, “Preisindizes für die Lebenshaltung in Deutschland 1924 bis 2001; Verbraucherpreise seit 1881,” GESIS data series ZA8290, table C.1, http://www.histat.gesis.org, accessed 10 December 2010; idem, “Verbraucherpreise,” http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Content/Statistiken/Zeitreihen/WirtschaftAktuell/Basisdaten/Content100/vpi101a.psml, accessed 10 December 2010; Statistics New Zealand, “Consumers Price Index,” Long-Term Data Series, table G.2.1, http://www.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts/long-term-data-series/prices.aspx, accessed 18 November 2010; Ministry of Economic Development, New Zealand Energy Data File 2010, table I.6, http://www.crownminerals.govt.nz/cms/pdf-library/folder.2007-05-17.4547411750/EDF%202010.pdf, accessed 10 December 2010. Amounts in 2005 local currency were then converted to 2005 U.S. dollars using the 2005 purchasing-power parity factors of Alan Heston, Robert Summers, and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009, http://pwt.econ.upenn.edu/php_site/pwt63/pwt63_form.php, accessed 18 November 2010.
Comparison of historical purchasing-power parities derived from my approach with independently derived estimates found in the economic history literature suggests that my expression of historical prices in terms of 2005 U.S. dollars is probably accurate to within 10 percent. For other estimates of purchasing-power parities, see Ward, Marianne and Devereux, John, “Measuring British Decline: Direct Versus Long-Span Income Measures,” Journal of Economic History 63 (2003): 835Google Scholar; Williamson, Jeffrey G., “The Evolution of Global Labor Markets Since 1830: Background Evidence and Hypotheses,” Explorations in Economic History 32 (1995): 190Google Scholar; Broadberry, Stephen and Burhop, Carsten, “Real Wages and Labor Productivity in Britain and Germany, 1871–1938: A Unified Approach to the International Comparison of Living Standards,” Journal of Economic History 70 (2010): 404–5CrossRefGoogle Scholar; Geoffrey T. F. Brooke, “Three Essays on Economic History” (Ph.D. diss., University of Auckland, 2011), 83. Under the gold standard as in effect in 1929, the official exchange-rate targets were $4.86 per British pound and 20.43 RM per British pound, while the British and New Zealand pound were supposed to be at parity; my data indicate that the purchasing-power parity exchange rates that year were $5.30, 19.36 RM, and NZ£1.28 per British pound.
4. For recent reviews of the elasticity of demand for gasoline, see D. Graham and S. Glaister, “Road Traffic Demand Elasticity Estimates: A Review,” Transport Reviews 24 (2004): 261–74; Phil Goodwin, Joyce Dargay, and Mark Hanly, “Elasticities of Road Traffic and Fuel Consumption with Respect to Price and Income: A Review,” Transport Reviews 24 (2004): 275–92; Martijn Brons, Peter Nijkamp, Eric Pels, and Piet Rietveld, “A Meta-Analysis of the Price Elasticity of Gasoline Demand: A SUR Approach,” Energy Economics 30 (2008): 2105–22.
5. Buehler, Ralph and Pucher, John, “Demand for Public Transport in Germany and the USA: An Analysis of Rider Characteristics,” Transport Reviews 32 (2012): 541–67.CrossRefGoogle Scholar
6. Sterner, Thomas, “Fuel Taxes: An Important Instrument for Climate Policy,” Energy Policy 35 (2007): 3194–3202.Google Scholar
7. I am currently preparing a book-length study comparing the politics of the gasoline tax in the United States, Great Britain, Germany, and New Zealand from 1909 to 2009.
8. In real terms the increases were even larger, as deflation amounted to a bit more than 15 percent in Great Britain and around 30 percent in the other three countries over this time period.
9. The lowest-taxed states were Connecticut, Rhode Island, Missouri, and the District of Columbia; the highest-taxed states were Florida and Tennessee.
10. Burnham, John Chynoweth, “The Gasoline Tax and the Automobile Revolution,” Mississippi Valley Historical Review 48 (1961): 435–59Google Scholar; Seely, Bruce E., Building the American Highway System: Engineers as Policy Makers (Philadelphia, 1987), 210Google Scholar; John C. Teaford, The Rise of the States: Evolution of American State Government (Baltimore, 2002), 108–10, 135; R. Rudy Higgens-Evenson, The Price of Progress: Public Services, Taxation, and the American Corporate State, 1877 to 1929 (Baltimore, 2003), 89–91; Owen D. Gutfreund, Twentieth-Century Sprawl: Highways and the Reshaping of the American Landscape (Oxford, 2004), 28–34; Paul Sabin, Crude Politics: The California Oil Market, 1900–1940 (Berkeley, 2005), 166–73, 182–201; Michael R. Fein, Paving the Way: New York Road Building and the American State, 1880–1956 (Lawrence, Kans., 2008), 104–6, 146–53; Wells, Christopher W., “Fueling the Boom: Gasoline Taxes, Invisibility, and the Growth of the American Highway Infrastructure, 1919–1956,” Journal of American History 99 (2012): 74–77.Google Scholar
11. Hughes, Thomas Parke, “Technological Momentum in History: Hydrogenation in Germany 1898–1933,” Past and Present 44 (1969): 123–24Google Scholar; Gottfried Plumpe, Die I. G. Farbenindustrie AG: Wirtschaft, Technik und Politik 1904–1945 (Berlin, 1990), 267–68; Reiner Flik, Von Ford lernen? Automobilbau und Motorisierung in Deutschland bis 1933 (Cologne, 2001), 75–77; Rainer Karlsch and Raymond G. Stokes, Faktor Öl: Die Mineralölwirtschaft in Deutschland 1859–1974 (Munich, 2003), 152–53.
12. William Plowden, The Motor Car and Politics in Britain (Harmondsworth, 1973), 297; Paul Goldsmith, We Won, You Lost, Eat That! A Political History of Tax in New Zealand Since 1840 (Auckland, 2008), 169–70, 175. Because Plowden de-emphasized the British tax increases, the only previous comparative study, which relies heavily on Plowden’s work for the British side of the story, also missed the significance of the large European tax increases during the Great Depression: Dunn, James A. Jr., “The Importance of Being Earmarked: Transport Policy and Highway Finance in Great Britain and the United States,” Comparative Studies in Society and History 20 (1978): 29–53.Google Scholar
13. For a comprehensive listing of motor vehicle density per country in 1935, see Petroleum Facts and Figures, 5th ed. (New York, 1937), 17–19.
14. Calculated from U. S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970 (Washington, D.C., 1975), 716 (car and truck registrations); Statistical Abstract of the United States 52 (1930): 388 (motorcycle registrations); Flik, Von Ford lernen? 280; B. R. Mitchell, British Historical Statistics (Cambridge, 1988), 557; G. T. Bloomfield, New Zealand: A Handbook of Historical Statistics (Boston, 1984), 248.
15. Nominal GDP data for 1929 to 1933 used in this article are from Louis Johnston and Samuel H. Williamson, “What Was the U.S. GDP Then?” MeasuringWorth, 2011, http://www.measuringworth.org/usgdp, accessed 6 December 2012; Lawrence H. Officer and Samuel H. Williamson, “What Was the U.K. GDP Then?” MeasuringWorth, 2011, http://www.measuringworth.org/ukgdp, accessed 6 December 2012; Statistics New Zealand, “Nominal Gross Domestic Product,” Long-Term Data Series, table E1.1, http://www.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts/long-term-data-series/national-income.aspx, accessed 6 December 2012; Albrecht Ritschl, Deutschlands Krise und Konjunktur 1924–1934: Binnenkonjunktur, Auslandsverschuldung und Reparationsproblem zwischen Dawes-Plan und Transfersperre (Berlin, 2002), table B-5 in unpaginated appendix.
For population, I am using Historical Statistics of the United States, Colonial Times to 1970, 8; B. R. Mitchell, International Historical Statistics: Europe, 1750–2000, 5th ed. (New York, 2003), 85, 87; Bloomfield, New Zealand, 46.
Angus Maddison, in his widely cited compilation of worldwide per capita GDP statistics (most recently updated as “Statistics on World Population, GDP and Per Capita GDP, 1-2008 AD,” http://www.ggdc.net/MADDISON/oriindex.htm, accessed 8 December 2012), shows relations between British, German, and New Zealand GDP broadly similar to those cited in the text, but it lists the American per capita GDP as only 25 percent higher than the British in 1929. As argued extensively by Ward and Devereux, “Measuring British Decline,” however, Maddison’s methodology, which relies on using GDP deflators to project rates of change in real GDP back in time, does not produce valid comparisons between British and American per capita GDP at purchasing-power parity for this time period.
16. Bowden, S. M., “Demand and Supply Constraints in the Inter-War UK Car Industry: Did the Manufacturers Get It Right?” Business History 33 (1991): 247CrossRefGoogle Scholar; Bowden, Sue and Turner, Paul, “Some Cross-Section Evidence on the Determinants of the Diffusion of Car Ownership in the Inter-War UK Economy,” Business History 35 (1993): 57CrossRefGoogle Scholar; Flik, Von Ford lernen? 56–57; James J. Flink, The Automobile Age (Cambridge, Mass., 1988), 190.
17. Germany: interpolated from Dell, F., “Top Incomes in Germany Throughout the Twentieth Century: 1891–1998,” in Top Incomes over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries, ed. Atkinson, A. B. and Piketty, T. (Oxford, 2007), 401Google Scholar, 416. Great Britain: Colin Clark, National Income and Outlay (London, 1937), 109. New Zealand: calculated from New Zealand Census and Statistics Office, Statistical Report on Prices, Wages and Hours of Labour, . . . for the Year 1929 (Wellington, 1931), 132; A. B. Atkinson and A. Leigh, “The Distribution of Top Incomes in New Zealand,” in Top Incomes over the Twentieth Century, 356. United States: Maurice Leven, Harold G. Moulton, and Clark Warburton, America’s Capacity to Consume (Washington, D.C., 1934), 205 (this figure represents far more of an extrapolation than the other three, as American income taxes had a far higher exemption threshold). I am using thresholds in 1929 prices of 5,000 RM for Germany, £250 for Great Britain, £300 for New Zealand, and $1,500 for the United States. For the many pitfalls of working with income tax statistics, see the exhaustive discussions in Top Incomes over the Twentieth Century, which used these same statistics to derive long-term trends in income inequality across ten countries.
18. More precisely, the coefficient of determination, or R2, for a linear regression of degree of motorization on percent of high-earning households is 0.80. For a broader study tying motorization levels to income levels, see David W. Jones, Mass Motorization and Mass Transit: An American History and Policy Analysis (Bloomington, 2010).
19. Share of registered motor vehicles calculated from “34,950,915 Autos Listed In World,” New York Times, 21 February 1930; oil production from Petroleum Facts and Figures, 5th ed., 56–57; share of refinery capacity calculated from Harold F. Williamson, Ralph L. Andreano, Arnold R. Daum, and Gilbert C. Klose, The American Petroleum Industry: The Age of Energy, 1899–1959 (Evanston, 1963), 645, 734. For a historic panorama of the American rise to predominance in oil production, see Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York, 1991), 19–55, 78–113, 207–28.
20. Statistical Abstract of the United States 52 (1930): 779.
21. Petroleum Facts and Figures, 5th ed., 160.
22. Williamson et al., American Petroleum Industry, 510–11, 526–27; Karlsch and Stokes, Faktor Öl, 123–25; John McCrystal, 100 Years of Motoring in New Zealand (Auckland, 2003), 138. For the development of gas prices in London (which also governed all of England and most of Scotland), see “Petrol Prices Increase,” Manchester Guardian, 3 November 1933. For those in Berlin (slightly higher than those in North Sea port cities, but lower than those in interior cities further from the coast), see “Der Spritzwang—eine Tragikomödie,” ADAC Motorwelt, 18 December 1931, 6–7; Flik, Von Ford lernen? 78. For those in Auckland (which generally equaled those in the other major port cities of New Zealand and were lower than prices further inland), see “Penny Cheaper,” Auckland Star, 12 August 1931; “Petrol Prices,” Auckland Star, 23 December 1933.
23. W. H. Hoffert and G. Claxton, Motor Benzole: Its Production and Use (London, 1931), chap. 2; Carl T. Wiskott, Die Besteuerung der Kraftfahrzeuge und Kraftstoffe: Zur Schaffung eines Zeitgemässen Strassennetzes (Berlin, 1928), table 14; “Betriebsstoffverbrauch in Deutschland im Jahre 1928,” ADAC Motorwelt, 7 December 1928, 20; Rudolf Bier, “Treibende Kräfte,” Freiburger Zeitung, 24 February 1930.
24. Plumpe, I. G. Farbenindustrie, 255–65, 287; Hughes, “Technological Momentum,” 106–32; Stranges, Anthony N., “From Birmingham to Billingham: High-Pressure Coal Hydrogenation in Great Britain,” Technology and Culture 26 (1985): 726–57.Google Scholar
25. In the states of the old Confederacy, excluding only oil-rich Texas, the rate averaged 5.11 cents per gallon, while in the ten industrial core states of Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Ohio, Michigan, Illinois, and California, it averaged only 2.91 cents per gallon. Calculated using rates from F. G. Crawford, The Administration of the Gasoline Tax in the United States, rev. ed. (New York, 1930), 8, weighted using gasoline consumption, as given in Public Roads Administration, Highway Statistics: Summary to 1945 (Washington, D.C., 1947), 6. See Crawford’s pamphlet for a very useful description of the overall system of the gasoline tax in 1929. For sectional differences in the imposition of the tax, see also Higgens-Evenson, The Price of Progress, 90–91. For urban motorists’ victories against the gasoline tax, see Frank B. Woodford, Alex J. Groesbeck: Portrait of a Public Man (Detroit, 1962), 213–14 (induced Michigan governor to veto tax increase); “Motorists in California Divide on Gasoline Tax,” New York Times, 26 July 1925 (induced California governor to veto tax increase); “Says Gasoline Motor Tax Will Soon Be Nation-Wide,” New York Times, 12 October 1924, and “Against Gas Tax,” Chicago Tribune, 7 December 1924 (overturned Massachusetts gas tax in referendum); “Illinois Gas Tax Unconstitutional,” Boston Globe, 25 February 1928 (initiated lawsuit that overturned Illinois gas tax).
26. “The Motor: Proposed Petrol Tax,” Evening Post (Wellington), 1 March 1924; “A Petrol Tax,” Evening Post (Wellington), 1 November 1927.
27. Plowden, The Motor Car and Politics, 214–17; Wa. Ostwald, “Zur Frage der Autosteuerreform,” ADAC Motorwelt, 7 June 1929, 3–4; Carl T. Wiskott, “Neuwagen- oder Kraftstoffsteuer?” ADAC Motorwelt, 19 July 1929, 14–16; Wa. Ostwald, “Zur Frage der Kraftstoffsteuer,” ADAC Motorwelt, 2 August 1929, 24. Motor license fees in 1929 (in terms of 2005 U.S. dollars per vehicle) averaged nearly $550 in Germany and nearly $750 in Great Britain, as compared to about $140 in the United States and about $90 in New Zealand. Calculated from data on motor vehicle registrations listed in note 14 and data on motor license fee revenues in Adamek and Saake, Die Strassenkosten und ihre Finanzierung, 112; Statistical Abstract for the United Kingdom 82 (1939): 178; Statistical Abstract of the United States 53 (1931): 406; New Zealand Transport Department, “Annual Report,” Appendix to the Journals of the House of Representatives, 1930 Session I, item H-40, p. 54. For a given class of motor vehicles, the difference in fees was even starker, but European motorists responded by preferentially using motorcycles, which had the lowest fees. In 1929, motorcycles represented 58 percent of the total motor vehicle fleet in Germany, 43 percent in Great Britain, 21 percent in New Zealand, and less than 1 percent in the United States. On the importance of motorcycles outside the United States, see Christoph Maria Merki, Der holprige Siegeszug des Automobils 1895–1930: Zur Motorisierung des Strassenverkehrs in Frankreich, Deutschland und der Schweiz (Vienna, 2002), 120–25, 398–99; Flik, Von Ford lernen? 80–85; Steve Koerner, “Four Wheels Good; Two Wheels Bad: The Motor Cycle Versus the Light Motor Car—1919–39,” in The Motor Car and Popular Culture in the Twentieth Century, ed. David Thoms, Len Holden, and Tim Claydon (Aldershot, 1998), 151–76.
28. For comparative discussions of the economic and fiscal course of the Great Depression in the various countries, see The World Economy and National Economies in the Interwar Slump, ed. Theo Balderston (Houndmills, 2003).
29. Moldenhauer to State Secretary Pünder, 3 February 1930, in Akten der Reichskanzlei, Weimarer Republik: Das Kabinett Müller II, ed. Martin Vogt (Boppard am Rhein, 1970), 1422–26; Moldenhauer to Pünder, 25 February 1930, Kabinett Müller II, 1495–1501; “Der ADAC gegen Monopole, Zoll- und Steuererhöhungen,” ADAC Motorwelt, 7 March 1930, 2. For background on Germany’s liquidity crisis in early 1930, see Theo Balderston, The Origins and Course of the German Economic Crisis, 1923–1932 (Berlin, 1993), 271–88; Ritschl, Deutschlands Krise und Konjunktur, 132–36; Hans-Peter Ullmann, Der deutsche Steuerstaat: Geschichte der öffentlichen Finanzen (Munich, 2005), 127–35.
30. “Ministerbesprechungen vom 27. February 1930, 10 und 16.15 Uhr,” Kabinett Müller II, 1509; “Ministerbesprechung vom 5. März 1930, 11 Uhr,” Kabinett Müller II, 1539; “Parteiführerbesprechung vom 8. März 1930, 10 Uhr im Reichstag,” Kabinett Müller II, 1555; “Parteiführerbesprechung vom 11. März 1930, 14 Uhr im Reichstag,” Kabinett Müller II, 1562; “Parteiführerbesprechung vom 26. März 1930, 16 Uhr im Reichstag,” Kabinett Müller II, 1601.
31. “Die Schraube ohne Ende,” ADAC Motorwelt, 7 March 1930, 1–2; “Wirtschaftsfeindliche Steuern,” ADAC Motorwelt, 21 March 1930, 1; E. Weighardt, “Die steuerliche Erdrosselung der Kraftfahrzeughaltung,” ADAC Motorwelt, 28 March 1930, 1–2.
32. Verhandlungen des Reichstags 427 (1930): 4196, 4199, 4551, 4554; “Deutscher Reichstag,” Freiburger Zeitung, 20 March 1930. Moldenhauer insisted that, upon becoming minister, he had resigned his supervisory board position and no longer had a financial connection to the firm.
33. “Kabinettssitzung vom 20. März 1930, 16 Uhr,” Kabinett Müller II, 1590; E. Weighardt, “Benzol-Zoll kontra Benzin-Zoll,” ADAC Motorwelt, 4 April 1930; “Um die Deckungsvorlagen,” Freiburger Zeitung, 8 April 1930; Verhandlungen des Reichstags 427 (1930): 4903, 4905. Customs duties were imposed on gross weight, including a standard allowance for container weight, while excise duties were imposed on net weight. To be fair to Moldenhauer, he had already intended to introduce the countervailing excise tax even before the Communist speakers drew public attention to his connection with I. G. Farben, but had delayed in order to give his officials time to draft the new tax properly. See Moldenhauer to Pünder, 25 February 1930, 1499; “Benzin und Benzol,” Freiburger Nachrichten, 1 March 1930.
34. “Fraktionsführerbesprechung vom 9. April 1930, 17.30 Uhr im Reichstagsgebäude,” in Akten der Reichskanzlei, Weimarer Republik: Die Kabinette Brüning I und II, ed. Tilman Koops (Boppard am Rhein: 1982), 44–45; Gerhard Schulz, Von Brüning zu Hitler: Der Wandel des politischen Systems in Deutschland, 1930–1933 (Berlin, 1992), 45–47.
35. Ullmann, Der deutsche Steuerstaat, 135; Schulz, Von Brüning zu Hitler, 99–120, 185–237; “Kabinettssitzung und Ministerbesprechung vom 29. September 1930, 18 Uhr,” Kabinette Brüning I und II, 471.
36. “Besprechung vom 7. Mai 1931, 16 Uhr,” Kabinette Brüning I und II, 1050–51 (quotation on 1051); Plumpe, I. G. Farbenindustrie, 267–68. On the poor economics of I. G. Farben’s hydrogenation process, see ibid., 265–67, and Hughes, “Technological Momentum,” 122–23. On the oil finds in Hannover and Thüringen, see Karlsch and Stokes, Faktor Öl, 142–52, and Dietrich Eichholtz and Titus Kockel, Von Krieg zu Krieg: Zwei Studien zur deutschen Erdölpolitik in der Zwischenkriegszeit (Leipzig, 2008), 112–14. On the factors affecting international gas prices, see Yergin, The Prize, 244–68.
37. “Chefbesprechung vom 27. Mai 1931, 16.30 Uhr,” Kabinette Brüning I und II, 1116; “Ministerbesprechung vom 1. Juni 1931, 16 Uhr,” Kabinette Brüning I und II, 1162.
38. Allmers, R., “Der Widersinn der neuen Mineralölzölle,” ADAC Motorwelt, 19 June 1931, 12–13Google Scholar; E. W., “Kraftfahrzeug-Haltung in Not!” ADAC Motorwelt, 10 July 1931, 2–4.
39. Ullmann, Der deutsche Steuerstaat, 136.
40. “Die wirtschaftliche Seite,” ADAC Motorwelt, 1 July 1932, 29; “Das Benzin-Quoten-Kartell,” ADAC Motorwelt, 9 September 1932, 2–3; “Die wirtschaftliche Seite,” ADAC Motorwelt, 20 January 1933, 28–29; Eichholtz and Kockel, Von Krieg zu Krieg, 120–34; Plumpe, I.G. Farbenindustrie, 269–79; Karlsch and Stokes, Faktor Öl, 165–68.
41. Parliamentary Debates, Commons, 5th ser., 237 (1930), cols. 2672, 2673 (quotation), 2680. On Labour Party attitudes toward taxes on the wealthy around 1930, see Martin Daunton, Just Taxes: The Politics of Taxation in Britain, 1914–1979 (Cambridge, 2002), 143–55; for other background on the 1930 budget, see ibid., 155–56; G. C. Peden, The Treasury and British Public Policy, 1906–1959 (Oxford, 2000), 212; Keith Laybourn, Philip Snowden: A Biography, 1864–1937 (Aldershot, 1988), 122–24; Philip Williamson, National Crisis and National Government: British Politics, the Economy and Empire, 1926–1932 (Cambridge: 1992), 76–77.
42. Daunton, Just Taxes, 156–57; Parliamentary Debates, Commons, 5th ser., 251 (1931), cols. 1407 (quotation), 1478, 1506, 1511, 1588, 1663, 1671, 1734, 1746–47, 1760; 253 (1931), cols. 663–67, 669–78; “Opinions on the Budget,” Manchester Guardian, 28 April 1931; “Higher Petrol Tax,” Times (London), 28 April 1931; “The Budget” [letter to editor], Times (London), 29 April 1931; “Higher ‘Bus Fares Most Unlikely,” Manchester Guardian, 29 April 1931; “The Budget” [letter to editor], Times (London), 1 May 1931.
43. Williamson, National Crisis, chaps. 8 and 9; Laybourn, Philip Snowden, 131–36; Peden, Treasury and British Public Policy, 237–44; Parliamentary Debates, Commons, 5th ser., 256 (1931), cols. 307–9, 800, 913–21; “Budget Views,” Manchester Guardian, 11 September 1931 (quotation); “Petrol Duty and Road Fund,” Times (London), 11 September 1931.
44. See, for example, the recent assessment in Middleton, Roger, “British Monetary and Fiscal Policy in the 1930s,” Oxford Review of Economic Policy 26 (2010): 414–41.Google Scholar
45. On the lack of domestic petrol production from either oil or coal, see Minister of Scientific and Industrial Research, “Production of Oil in New Zealand,” Appendix to the Journals of the House of Representatives, 1933 Session I, item H-34B.
46. “Customs Duties,” Evening Post (Wellington), 23 July 1930; “Petrol Tax Increased to 7d,” Auckland Star, 23 July 1930; “The Estimates,” Evening Post (Wellington), 25 July 1930; “The Financial Statement,” Akaroa Mail, 25 July 1930. For the general political situation, see Michael Bassett, Coates of Kaipara (Auckland, 1995), 159–60.
47. A Bombshell,” Evening Post (Wellington), 23 July 1930 (first quotation); “Dunedin Opinions,” Evening Post (Wellington), 24 July 1930; “South Island Will Suffer,” Evening Post (Wellington), 25 July 1930; “Raid on Funds,” Auckland Star, 26 July 1930; “The Petrol Tax,” Evening Post (Wellington), 29 July 1930; “Motorists Protest: United Stand,” Evening Post (Wellington), 31 July 1930; “Petrol Tax Protest,” Evening Post (Wellington), 2 August 1930; “Highway Finance,” Evening Post (Wellington), 31 July 1930.
48. “Altered Plan,” Evening Post (Wellington), 30 July 1930; “Friendly Advice,” Evening Post (Wellington), 1 August 1930; “Eight More Speeches,” Evening Post (Wellington), 7 August 1930; “Nearing the End,” Evening Post (Wellington), 8 August 1930; “The 3d. Concession Fare,” Evening Post (Wellington), 31 July 1930; “The Budget,” Evening Post (Wellington), 2 August 1930; “Budget Debate Continues,” Evening Post (Wellington), 6 August 1930; “Cutting the Cloth,” Evening Post (Wellington), 6 August 1930; “In Defence,” Evening Post (Wellington), 8 August 1930; “The Tax Reduced,” Evening Post (Wellington), 14 August 1930; “Passed at Last,” Auckland Star, 15 August 1930.
49. “The Estimates,” Evening Post (Wellington), 31 July 1931; “Taxes for All,” Auckland Star, 31 July 1931; “Motorists’ Escape,” Auckland Star, 1 August 1931; for Forbes’s 1931 budget, see also Goldsmith, We Won, You Lost, 167–68.
50. Bassett, Coates of Kaipara, 161–71.
51. “The National Accounts,” Evening Post (Wellington), 7 October 1931; “Petrol Tax,” Evening Post (Wellington), 15 October 1931; “Nelson News,” Evening Post (Wellington), 14 October 1931; “The Customs,” Evening Post (Wellington), 5 November 1931; for background on Downie Stewart’s supplemental budget, see also Goldsmith, We Won, You Lost, 168–71.
52. “Financial Proposals,” Evening Post (Wellington), 8 April 1932; “The Highways,” Evening Post (Wellington), 6 September 1932; “Petrol Tax,” Evening Post (Wellington), 6 May 1932.
53. “Return to Treasury of $2,540,000,” Evening Post (Wellington), 9 February 1933; “Price of Petrol,” Auckland Star, 10 February 1933; “Motorists Protest,” Evening Post (Wellington), 10 February 1933 (all quotations); “Petrol Sales,” Auckland Star, 16 February 1933; “‘Reservoir Dry,’” Auckland Star, 25 February 1933; “Tenpence,” Auckland Star, 25 February 1933. For the political background, see Bassett, Coates of Kaipara, 189–99; Goldsmith, We Won, You Lost, 174–76. It just so happened that, just at the moment when Coates was forcing through this final tax increase, the first load of cheap Soviet gasoline, imported by a company founded by several enterprising motor club officials, was on its way to New Zealand. Soon after the gasoline arrived in March 1933, a price war erupted that would lower the pre-tax price of gasoline in Auckland to $2.10 per U.S. gallon by the end of the year—a price drop that more than equaled the petrol tax increases of the previous four years. See “Motorists’ Petrol Company,” Evening Post (Wellington), 7 November 1931; “Oil Tankers,” Evening Post (Wellington), 25 February 1933; “From Russia,” Auckland Star, 6 March 1933; “Bulk Petrol,” Evening Post (Wellington), 15 March 1933; “Petrol Prices,” Auckland Star, 23 December 1933; McCrystal, 100 Years of Motoring, 127.
54. The best history of the struggle for an oil import tariff is in Norman E. Nordhauser, The Quest for Stability: Domestic Oil Regulation, 1917–1935 (New York, 1979), 47–56, 74–80; see also Gerald D. Nash, United States Oil Policy, 1890–1964: Business and Government in Twentieth-Century America (Pittsburgh, 1968), 105–110. For opposition to the 1932 import tariff, see Dewey L. Fleming, “Fight for Beer Will Be Added to Tax Battle,” Baltimore Sun, 9 March 1932; “50 Democrats Unite in Fight upon Sales Tax,” Baltimore Sun, 17 March 1932; Dewey L. Fleming, “Battle over Oil Import Tax Begun,” Baltimore Sun, 16 April 1932; Arthur C. Wimer, “Tariff Vote Is Explained by Walcott,” Hartford Courant, 22 May 1932; “Attention, Motorists” [editorial], Washington Post, 8 April 1932.
55. “Gasoline Price Advance,” Wall Street Journal, 17 June 1932; Armstrong, J. S., “Confidence Shown by Member Banks,” Baltimore Sun, 21 June 1932Google Scholar; Sullivan, James T., “Bootleg Gasoline May Come with Increase of Tax Here,” Boston Globe, 26 June 1932.Google Scholar
56. Yergin, The Prize, 258; Petroleum Facts and Figures, 5th ed., 160.
57. Burnham, “Gasoline Tax and the Automobile Revolution,” 450–55; “End Proposed To ‘Grab’ Policy in Getting Oil,” Christian Science Monitor, 13 November 1931; “Cuts Demanded In Gasoline Tax,” Los Angeles Times, 13 November 1931.
58. Average gasoline tax rate increases calculated from rates in Petroleum Facts And Figures, 5th ed., 179, which I have found to be the most accurate compilation for the Great Depression years. State rates were weighted using gasoline consumption, as given in Highway Statistics: Summary to 1945, 6. The Old South includes Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Tennessee, Arkansas, and Louisiana; the Mountain West includes Montana, Wyoming, Idaho, Washington, Oregon, Nevada, Utah, Colorado, New Mexico, and Arizona. For specific state actions, see “Fla. Senate Votes More Gasoline Tax,” Atlanta Constitution, 5 July 1931; “Solons Compromise on Florida Salaries,” Atlanta Constitution, 26 July 1931; “Seven-Cent Gas Levy Voted for Tennessee,” Atlanta Constitution, 17 December 1931; W. A. Warn, “Republicans Seek Gasoline Tax Rise,” New York Times, 19 February 1930; “Fight Increase in Gasoline Tax,” New York Times, 26 February 1930; “Gas Tax Increase Meets Opposition from Motor Users,” Hartford Courant, 25 February 1931; “Rolph Will Call Special Session on Jobless Aid,” Los Angeles Times, 26 August 1931; “Club Fights ‘Gas’ Tax Rise,” Los Angeles Times, 12 September 1931; “Car Dealer Fight opens on Gas Tax,” Los Angeles Times, 15 September 1931; “Tax to Aid Jobless Urged,” Los Angeles Times, 14 October 1931; Myra Nye, “Tax Proposal under Attack,” Los Angeles Times, 3 November 1931; “Tax Plans Draw New Fire,” Los Angeles Times, 11 November 1931; “North Dakota Vote Bars Sunday Films,” Washington Post, 28 June 1930; “One Delegate for Murray Is Possible,” Hartford Courant, 18 March 1932; “Higher Gasoline Tax Is Proposed in Maine,” New York Times, 12 April 1931; “G.O.P. Leads in Maine,” Los Angeles Times, 13 September 1932.
59. Warn, W. A., “Legislature Gets Budget,” New York Times, 13 January 1932Google Scholar; “Auto and Oil Men Fight Gas Tax Rise,” New York Times, 1 February 1932; “Governor’s Budget Slashed $21,455,000,” New York Times, 3 February 1932; “New Motor Taxes Bitterly Opposed,” New York Times, 10 February 1932; “Legislature Votes 104 Million Tax Rise,” New York Times, 17 February 1932.
60. “Pinchot Calls Idle-Aid Session of Legislature,” Baltimore Sun, 2 November 1931; “Pinchot and Leaders Agree on Relief Plan,” New York Times, 2 December 1931; “Banks Refuse Again to Help Philadelphia,” Baltimore Sun, 17 December 1931; “Sees Motorists’ Fight to Defeat 5 Cent Gas Tax,” Chicago Tribune, 3 December 1931; Hal Foust, “Organized Auto Owners Protest Gas Tax Boost,” Chicago Tribune, 13 December 1931; “Jobless Relief Appeal Is Made to Legislators,” Chicago Tribune, 5 January 1932; Parke Brown, “See Way Out of Snarl Delaying Jobless Relief,” Chicago Tribune, 27 January 1932; “Editors Hear Some Taxation Facts,” Boston Globe, 27 January 1932; “Bill to Increase Gasoline Tax to 4 Cents Opposed,” Boston Globe, 10 February 1932; “Petroleum Companies to Fight Four-Cent Tax,” Boston Globe, 31 May 1932; “Votes State Loan of $20,000,000,” Boston Globe, 1 June 1932; “Fights Jersey Gasoline Tax Rise,” New York Times, 3 May 1932; “Fight Jersey Tax Rise,” New York Times, 9 May 1932; “Hague Sees Defeat of Jersey Tax Plan,” New York Times, 17 May 1932; “Budget Bill Voted by Jersey Senate,” New York Times, 2 June 1932; “Gov. Lehman Seeks Big Tax Increase,” Baltimore Sun, 31 January 1933; “Urges Wide Protest on Gasoline Tax Rise,” New York Times, 21 February 1933; W. A. Warn, “State Salary Cuts in Lower Levels Republican Plan,” New York Times, 1 March 1933; “Merchants Fight State Sales Tax,” New York Times, 9 March 1933; “N.Y. Beer Control Dispute Settled,” Baltimore Sun, 9 April 1933.
61. Williams, Robert E., “Tarheel Teachers Get No More Cuts,” New York Times, 24 July 1932Google Scholar; “South Dakota 5 Percent Loan Arranged,” Wall Street Journal, 19 January 1933; Erwin L. Levine, Theodore Francis Green: The Rhode Island Years, 1906–1936 (Providence, 1963), 147–48, 151–53; Mengert, Herbert R., “Gov. White Wages Stiff Fight in Ohio,” New York Times, 28 May 1933Google Scholar; “Sales Tax Proposal Is Defeated in Ohio House by 88–37 Vote,” Chicago Tribune, 21 June 1933; “Oklahoma to Offer $9,000,000 Notes,” Wall Street Journal, 15 May 1933; “Oklahoma Note Sale Planned,” Wall Street Journal, 26 October 1933; “Governor Wins As Legislature Ends,” Boston Globe, 23 July 1933; Finla G. Crawford, The Gasoline Tax in the United States 1934 (Chicago, 1935), 30.
62. Essary, J. F., “New Sources of Revenue Sought For U.S.,” Baltimore Sun, 26 May 1931Google Scholar; “Federal Gasoline Tax a Possibility,” Wall Street Journal, 26 May 1931; Hal Foust, “A. A. A. Opposes Federal Tax on Motor Vehicles,” Chicago Tribune, 5 June 1931; “Auto Tax Protests Registered,” Los Angeles Times, 16 August 1931; “U.S. Told to Live on Income,” Chicago Tribune, 14 January 1932; “New Tax Rise Asked by Mills to Yield $337,000,000 More,” New York Times, 17 February 1932.
63. “Sales Tax Draft Speeded by Mills,” New York Times, 25 February 1932; “Motordom on Parade,” Hartford Courant, 6 March 1932; “Organized Motorists Battle Proposed Taxes,” Los Angeles Times, 6 March 1932; “House Gets Bill Monday,” New York Times, 6 March 1932.
64. “Hoover in Senate Declares Fiscal Emergency Exists,” Christian Science Monitor, 31 May 1932; “Senate Taxes Gasoline to Balance Budget,” Boston Globe, 1 June 1932; J. B. McDonnell, “72–11 Ballot On Measure Ends Battle,” Washington Post, 1 June 1932; J. F. Essary, “Measure Adopted 72–11; One Cent Levy on Gasoline Is Approved by Members,” Baltimore Sun, 1 June 1932; “House Will Vote on Taxes Today,” Wall Street Journal, 4 June 1932; “Protest Federal Gasoline Tax,” New York Times, 3 June 1932. For broader analyses of the legislative struggles over what became the Revenue Act of 1932, see Blakey, Roy G. and Blakey, Gladys C., “The Revenue Act of 1932,” American Economic Review 22 (1932): 620–40Google Scholar; Jordan A. Schwarz, The Interregnum of Despair: Hoover, Congress, and the Depression (Urbana, 1970), 117–34; Mark H. Leff, The Limits of Symbolic Reform: The New Deal and Taxation, 1933–1939 (Cambridge, 1984), 22–24, 48–54.
65. “Mills Insists Need to Slice Costs Is Vital,” Christian Science Monitor, 7 December 1932; “Roosevelt to Extend Federal Gasoline Tax,” Boston Globe, 2 April 1933; “New Taxes Loom in Beer Bill Delay,” New York Times, 25 December 1932; “House Leaders Drop Move for Sales Tax,” Atlanta Constitution, 28 December 1932; “New Move Started to Extend Gas Tax,” Boston Globe, 22 January 1933; “Agreement Reached on Revenue Items,” New York Times, 10 June 1933; “‘Gas’ Tax Opposition,” Wall Street Journal, 28 January 1933; “Gas Tax Extension Meets Opposition,” Atlanta Constitution, 28 January 1933.
66. “Sales Tax Decision Left to Congress by the President,” New York Times, 16 May 1933; “Liquor Tax to Raise Public Works Funds,” Boston Globe, 19 May 1933; “Public Works Czar Is Contemplated,” Baltimore Sun, 3 May 1933; “Labor and Industry Back Recovery Bill,” Washington Post, 20 May 1933; “Roosevelt Wants Oil Control Plan in Recovery Bill,” New York Times, 21 May 1933; “Excise Tax List Is Put into Bill,” Boston Globe, 23 May 1933; “Gasoline Tax Fought,” New York Times, 24 May 1933; “Fight Federal Gasoline Tax Rise,” New York Times, 29 May 1933; “Gasoline Tax Rise Is Protested Here,” Boston Globe, 1 June 1933; “Protest Tax Moves at Hearing,” New York Times, 1 June 1933; E. L. Yordan, “Fight Gas Tax Rise,” New York Times, 4 June 1933; “Harrison Urges Shift in Tax Plan,” Baltimore Sun, 3 June 1933; W. B. Francis, “Roosevelt Recovery Act Wins Senate Passage,” Los Angeles Times, 10 June 1933; “Vets’ Bill Sent to Conference,” Boston Globe, 14 June 1933; “Election Results,” Los Angeles Times, 29 June 1933; David E. Kyvig, Repealing National Prohibition, 2nd ed. (Kent, Ohio, 2000), 178; “Ruling on Taxes,” Wall Street Journal, 15 November 1933. For a broader discussion of the tax provisions of the National Industrial Recovery Act of 1933, see Leff, Limits of Symbolic Reform, 54–61.
67. I have searched the papers of Secretary of the Treasury Ogden L. Mills at the Library of Congress in Washington, D.C., and the Central Files of the Office of the Secretary for 1917–32 in the Records of the Treasury Department (Record Group 56) at the National Archives, College Park, Md. It is entirely possible that there was no explicit decision reached to ask for only a small gasoline tax increase—that is, the thought might never even have occurred to Treasury Department officials to ask for more. If so, this would be quite consistent with my argument further below that the Treasury Department did not need a larger increase in this tax.
68. For the United States, I am taking anticipated revenues for the Revenue Act of 1932 (excluding postal-rate increases) from Blakey and Blakey, “Revenue Act of 1932,” 620–21; for the National Industrial Recovery Act of 1933 revenue provisions from “New Tax Plan Places Burden More Heavily upon Business,” Christian Science Monitor, 2 June 1933; and for the new beer tax from “New Federal Taxes Not to Be Proposed,” New York Times, 6 April 1933. I am also using $360 million of revenue for the Agricultural Adjustment Act of 1933 production taxes, estimated from data in Leff, Limits of Symbolic Reform, 12, and a $72 million revenue effect for the Smoot-Hawley Tariff of 1930, derived from average dutiable imports of around $1.2 billion and an average increase in the tariff rate of 6 percent, as given in Douglas A. Irwin, Peddling Protectionism: Smoot-Hawley and the Great Depression (Princeton, 2011), 105, 111. For New Zealand, I am taking revenue estimates from “Minister Explains,” Evening Post (Wellington), 23 July 1930; “Passed at Last,” Auckland Star, 15 August 1930; “Balancing the Budget,” Evening Post (Wellington), 19 August 1930; “Income Tax Reduced,” Evening Post (Wellington), 24 September 1930; “Budget Summary,” Evening Post (Wellington), 31 July 1931; “The National Accounts,” Evening Post (Wellington), 7 October 1931; “The Customs,” Evening Post (Wellington), 5 November 1931; “House of Representatives,” Evening Post (Wellington), 5 April 1932; “Return to Treasury of £2,540,000,” Evening Post (Wellington), 9 February 1933 (because in some cases the revenue estimates were provided only for partial years that had already begun, they had to be annualized to provide comparable information). For Great Britain, the revenue estimates are from Parliamentary Debates, Commons, 5th ser., 237 (1930), cols. 2673, 2677–78; 251 (1931), col. 1407; 256 (1931), cols. 307–9; 264 (1932), cols. 1424, 1438; 277 (1933), cols. 53, 54, 57. In each case, I have normalized the revenue estimates for different years by computing them as amounts per capita in 2005 U.S. dollars; normalizing them as a percentage of GDP would produce broadly similar results. Because of the opaque nature of budgeting in Germany during this era of presidential emergency decrees, I am not able to provide comparable figures for this country.
69. In terms of 2005 U.S. dollars, this works out to an increased tax burden of about $200 per person for the U.S., $230 per person for Great Britain, and $390 per person for New Zealand. The relatively smaller size of the tax increase in the United States during the Great Depression was due in large part to the smaller size of the government at its outset. In 1928/29, total central government (federal and state) taxes and customs duties were around 5 percent of American GDP, 10 percent of German and New Zealand GDP, and nearly 15 percent of British GDP. In recent years, political historians have made powerful arguments that the American state in the early twentieth century was not underdeveloped relative to those in Europe; see, for example, Novak, William, “The Myth of the ‘Weak’ American State,” American Historical Review 113 (2008): 752–72.Google Scholar But at least in terms of tax collections, the American central state was in fact smaller than those overseas.
70. The revenue estimate in New Zealand for the 1930 petrol tax hike works out to an assumed consumption of about 45 U.S. gallons per capita, while that for the 1933 petrol tax hike assumes about 33 U.S. gallons per capita. Meanwhile, the revenue estimate for the Revenue Act of 1932 calculates out to an assumed consumption of 120 gallons per capita, and that for the National Industrial Recovery Act of 1933 to a consumption of 99 gallons per capita. Actual highway-use consumption was 45 U.S. gallons per capita in New Zealand for the year ended 31 March 1934, and 114 gallons per capita in the United States for calendar year 1933; calculated from “Customs Revenue,” Evening Post (Wellington), 16 August 1934; Highway Statistics to 1945, 5. This works out to about 360 U.S. gallons per motor vehicle in New Zealand and 600 gallons per motor vehicle in the United States; thus, not only did the United States have more motor vehicles per capita, but it also consumed more gasoline per vehicle.